Property and Exchange

Property is what’s exchanged in markets, and this chapter examines its nature, introduces the ideological dispute between Locke and Bentham over its origins and the implications of their views for government and individuals, and shows how and to what effect property is exchanged in explicit markets. Rights are distinguished from objects, and property is defined as rights to control specific objects for specific uses at specific times, so different people may own different property rights in a single object at the same time. For Locke, individuals have these rights naturally and create government to protect them, while Bentham argues that government creates rights and can allocate them coercively toward its proper ends. The creation of new rights to resolve disputes is considered, and movement of property rights to higher-valuing owners by voluntary exchange in perfectly favorable conditions is illustrated by a hypothetical dispute over the use of a house.